Micron season 🔎 Can you beat a 86% gross profit margin?
Micron Technology (MU) reports its fiscal fourth-quarter results, but the real test isn’t just beating revenue and earnings expectations—it’s whether the company can keep its gross margin above 86%.
📌 Why does 86% matter?
The company’s guidance points to a margin of about 86%. So reaching 87% or 88% would mean pricing power and the product mix were better than expected.
There are 3 key factors that could push margins higher:
1️⃣ Higher DRAM and HBM prices
Current profit strength comes largely from rising memory prices, not a huge increase in shipment volumes. If prices keep climbing, margins can improve.
2️⃣ AI product expansion
A higher share of HBM and advanced products can improve the product mix, especially if demand for HBM4 stays strong.
3️⃣ Supply tightness
If demand remains higher than Micron’s ability to supply, the company will maintain stronger pricing power—supporting margins.
But there’s a major risk: increased supply in the future. New production capacity entering the market could pressure memory prices and pull margins down to lower levels.
Do I watch it on September 30?
Most importantly for me isn’t just the fourth-quarter number, but:
• Next quarter’s gross profit margin
• Revenue and earnings outlook
• HBM4 pricing and demand
• Long-term contracts
• The volume of new supply.